The New Face of Government

One of the central issues of our time is the competence of government. Governments throughout the Western world have over-promised and under-delivered. We've seen with diamond clarity that the states of the past didn't have enough answers to the big problems, especially the problems of jobs and public debt.

As Peter Drucker has said, "The next decades will make unprecedented demands on political courage, political imagination, political innovation, and political leadership. They will demand high government competence." Today I want to explore those themes in the context of the forthcoming budget, and of the government's jobs and growth agenda announced by the Prime Minister five months ago. I'm going to talk briefly about how the government is getting back to basics through our sweeping review of government programmes and services which will be unveiled in the upcoming budget. I will also be making an announcement about simplifying government by eliminating or streamlining federal agencies, boards and commissions.

The Government's Fiscal Situation

First, I want to talk about the government's fiscal situation and the course we have charted for reducing the deficit. The level of debt and deficit that we have today in Canada is simply unsustainable. When I mentioned political courage a moment ago, I had in mind the promise we made to Canadians when we came to office: to reduce the federal deficit from about six per cent to three per cent of G.D.P. by the end of our third year in office. We set out to achieve that goal and we are on track. In our first budget, we made a start by introducing more than $20 billion in deficit reduction actions over a three-year period. There were $5 of cuts for every $1 in revenue action. We are well on the way to meeting our deficit reduction target for the current fiscal year. More importantly, we introduced a number of policies to stimulate job creation, and the economy responded admirably.

Since we came to office in November 1993, 436,000 jobs have been created. The Canadian economy is now outperforming those of all G-7 countries and is expected to do the same next year. Canadians have told us repeatedly, during the most broad-based and open pre-budget consultation exercise in Canadian history, that they want the government to take the strong measures that will be necessary in this year's budget, which is coming in two weeks or so.

We have listened and we are taking action. I hope that no one is under any illusions. We will continue to reduce the deficit, and we will continue to meet our targets. Canadians know where we are headed and can count on us to get there. The results will be a stronger economy, a smaller government, and the kind of job creation that flourishes in a growing and healthy economic climate.

A central part of the budget and a key element of the jobs and growth agenda is what we call the programme review. Some months ago, the Prime Minister asked me to conduct a fundamental review of every federal department, every programme and every government activity. The review will focus the federal government on its key priorities, get it back to basics and allow the government to cut spending in an orderly way. It will do so by adhering to the three aims of the programme review. The first aim is to strengthen the public administration of federal programmes and services. This will lead to a smaller, more efficient federal government, delivering high priority programmes to Canadians. The second aim is to contribute to the modernisation of Canadian federalism. Government should deliver only those programmes and services that it is best equipped to deliver. And the third aim is to help the government meet its fiscal objectives. It is nothing less than a basic rethinking of what the federal government should do, and what Canadians can afford.

While the details will not be available until the release of the budget, let me stress what this review is not. It is not another exercise in bureaucrat bashing. It is not an attempt to introduce another transitory management fad, and it is definitely not a witless slash and burn exercise. This is the most sweeping review of the federal government's programmes and services in two generations.

Ottawa has seen many studies in the past, such as the Lambert Royal Commission in 1979, the Nielsen Task Force in 1986, and the Public Service 2000 exercise in 1990. But as Michael Trebilcock of the University of Toronto has observed, "Fairly routinely, having attained office, the parties largely ignore the issue or confine themselves for the most part to moving bureaucratic organisational charts around."

Why is our programme review different? Quite simply, this government has the political will and imagination to carry out what needs to be done. It is focused on the larger issues facing us today: the need to cut government spending, to strengthen the economic climate so that job creation can flourish and to protect the vulnerable in society. We are determined to reshape government, and we will do so. In fact, we have to do it. Canada can no longer afford the panoply of programmes, subsidies, grants and activities that seem to have taken on lives of their own over the past years.

Our review is also different because every minister and every department was involved. Each one has questioned the aims of his or her department, how it does business, and how it could operate more effectively. Ministers and their departments have taken the programme review very seriously, and some have already indicated the nature of their proposed approaches. Departments are discarding their non-core responsibilities. They are merging similar programmes and services within a single department or between two or more federal departments. They are thus eliminating costly overlap and duplication among departments. They are using new technologies to lower the costs of programme delivery while increasing service standards, and they are financing appropriate programmes by cost recovery and user fees.

Let me give some examples: Canada's transportation system is overbuilt, and subsidies are creating distortions in the economy. Mr. Young has announced that Transport Canada will no longer own, operate and subsidise large parts of the system. It will instead focus on core policy and regulatory responsibilities, while continuing to ensure the safety and security of the travelling public. For example, the department is turning over key parts of the National Airports System to airport authorities. Local airports will be offered to municipalities or the private sector to run. Communities will have a greater say in the transportation services they receive.

Subsidies also inhibit the diversification of agriculture. Mr. Goodale is working closely with the provinces to shift the subsidy system from income support to income stabilisation. In the Department Of Industry, Mr. Manley has announced that the era of providing subsidies to big business is ending. The private sector is the engine of economic growth and job creation. Nevertheless, the federal government will continue to have a significant role in creating the climate for business to be able to invest, innovate and compete for markets.

The Department of Fisheries and Oceans under Mr. Tobin is concentrating its work on science and regulations for conservation and sustainable use of ocean resources, again in concert with the provinces. At the Department of National Defence, Mr. Collenette has issued a white paper underscoring the adjustments necessary to reflect the needs and fiscal realities as we head into the 21st century.

Finally, while not a part of the programme review, social security reform is another key area that must reflect the needs of the 21st century. My colleague, Mr. Axworthy, has succeeded in convincing Canadians that we must modernise our social programmes, making them affordable, and supportive of our commitment to getting Canadians back to work, while protecting those who are truly vulnerable. The legislation which will be introduced by the end of the year will demonstrate that this is a government of hard heads and soft hearts. Protecting the vulnerable is an essential function of government and affordable compassion is an indelible element of contemporary liberalism. Yet we must be fair to taxpayers, and fairness to taxpayers means eliminating abuse, honouring the pension contributions that the elderly have already made, reducing the power of professional special interest groups, and diminishing social subsidies for the well off. Government's role is to provide a springboard, not a hammock.

These examples suggest how thoroughly every department is rethinking its aims, roles and responsibilities. The exercise has not been easy. Ministers have taken it very seriously and difficult decisions have been made. Obviously I can't anticipate final budget decisions or the full extent of the changes. I can assure you, however, that all members of the government fully support the Prime Minister and the Minister of Finance, who will be presenting a budget that is fair and equitable and which Canadians will accept.

While the programme review is the main source of the spending cuts to be announced in the budget, I want to emphasise that the government is rethinking every aspect of the federal presence in Canada. For example, I've also been looking at more than 400 federal agencies, boards, commissions and advisory bodies over the past year. Ministers reviewed the various agencies within their portfolios, and recommendations for change were made in consultation with the agencies themselves and with Canadians served by them. Our aim was to simplify government by eliminating unnecessary or inactive organisations and streamlining others. We had no set targets; rather we wanted to identify sensible and practical changes to make government work better. The 1994 budget launched this review, and its work is now completed.

Last week I introduced the first legislation eliminating or significantly streamlining 22 agencies, which will save taxpayers about a million and a half dollars annually. More legislation will follow. Today I am releasing the final report of the agency review, and the government's decisions affecting 1209 agencies, commissions, boards and advisory bodies. We are winding up 734 agencies and we are restructuring and streamlining 475 others. These decisions will eliminate 6652 order-in-council appointments, with savings to taxpayers that will approach $10 million.

We are also reforming the processes for appointing, paying and disciplining order-in-council appointees.

Efficiency of the Federation

A related area of concern to the government has been overlap and duplication of programmes and services among the federal, provincial and territorial governments. As another part of our commitment to good government, we've been working with the provinces and territories to improve and harmonise programme and service delivery for Canadians. For example, pulp and paper mills were subject to three layers of environmental inspectors: federal, provincial and municipal. Now we have agreed that only one inspector is necessary. Since this government took office, we've signed more than 60 agreements with the provinces and territories, eliminating small points of friction, overlap and duplication of services and programmes. I say "small," but the overall result of this approach is a change to the nature of federalism.

Our conceptions of the nature of the state are evolving, and I believe they are moving in very positive directions. Despite the claims of Jacques Parizeau and the Quebec government, I believe that what I have been outlining here today clearly demonstrates that there is no such thing as status-quo federalism. These are challenging times for all of us, not only on the economic and social fronts, but on the political front as well.

Our strategy for the Quebec referendum is very straightforward. It has three elements: first, to stay on the track of good government; second, to demonstrate that federalism in Canada works well for Canadians and is constantly evolving; and third, to put the burden of proof on the separatists.

Every day we demonstrate to all Canadians, including Quebeckers, that Canada works through our actions as a government. Whether as a result of trade missions abroad (from which business and government derive contracts and jobs as opposed to lint from ceremonial red carpets), the infrastructure programme (which has put people back to work across the country), or reducing the number of public sector jobs and appointments, we are restoring faith in government and in Canada.

The second key element of our strategy is to demonstrate that federalism, in Canada, is a very pragmatic and flexible system of government. We will burst the "status quo" balloon by clearly demonstrating that Canada and federalism have been constantly evolving, and that Quebec has flourished within Canada and continues to do so, enriching the whole of the country and benefitting from federal structures and programmes.

And finally, the third element of our strategy is to place the burden of proof directly on the separatists. It is up to the Quebec government to prove to Quebeckers why they would be better off outside Canada, the best country in the world.

The next few months will see real and substantial changes. We are going to have a very different federal government. It will be a federal government focused on exercising its national roles and responsibilities, and on national priorities. It will be a government that delivers the services Canadians value at a price we can afford. And it will be a smaller federal government.

As a major tool of our jobs and growth agenda, the budget will set the new directions needed to meet our fiscal challenges and to get government right. It will ensure continuing deficit reduction in 1997/98 and beyond by fundamentally restructuring expenditures. And it will distribute the burden of restraint equitably among Canadians and the regions of Canada.

We are attempting to restructure government and reorder public finances at a time when Canada is facing a threat to its very existence as a nation. But as the Prime Minister has said so often, Quebeckers want what we all want: good jobs and a secure future. As clients, Canadians want services that are fast, accessible, reliable, and responsive. As citizens, Canadians want services that guarantee health and safety, public security, fairness and equity, and economic well-being. And as taxpayers, Canadians want government that is efficient and cost-effective.

In other words, Canadians want competent government and that is what this government is delivering. Canadians want a united Canada and this is what we are working for.

The appreciation of the meeting was expressed by Herbert Phillipps Jr., President, The Canadian Club of Toronto.